Leases Can Last Longer Than Your Business.
Most leases do not let you out simply because your business fails or you cannot conduct business for some reason. Unless you specifically insist that a clause be inserted to protect you from specific things happening (or not happening), a lease will usually bind you for the entire term. So, if you sign a lease and then can't get financing, or your liquor license falls through, or the zoning turns out to be not exactly what you needed, normally you are completely out of luck. Call a Denver Business Lawyer at The Vasilco Law Group, P.C. to discuss your commercial lease before considering a strategic breach for any such reason.
Foreclosure Can Kill Your Lease! So Beware of Weak Landlords Offering Great Leases.
Often, a landlord gets desperately behind in his loan payments and offers spectacularly generous leases to tenants, hoping to boost occupancy, increase cash flow and catch up on those payments. Woe be to the tenant who relies upon such a lease. They move in, invest tens of thousands in the location, and begin operating under the assumption that the superb lease terms will be in effect for many years. Then a foreclosure notice comes from the bank. The building is seized and the lease terminated. Creditors in foreclosure take the property free of the leases and do not need to honor their terms. If they are below market, the banks will offer new leases with stricter terms. This has ruined many fine businesses. The secret is to insert a clause in the lease (which the bank must also sign) that requires the lender to honor the terms of the lease in the event of a default by the landlord. This little clause can be as good as gold, but it must be drafted right. Call a business lawyer at The Vasilco Law Group to learn more.